Technical Update – EURUSD, GBPUSD, AUDUSD and NZDUSD

On daily chart the pair now seems to have conquered 100-day SMA resistance, but on 4-hourly chart the pair seems to be in the process of forming a bearish Head and Shoulders chart-pattern. The pattern, however, is completed only once the pair breaks below the neck-line support, currently near 1.1140-30 area. A break below the neck-line support is likely to trigger an accelerated downfall towards 1.1050 previous resistance break-point turned support area. The downfall could further get extended towards the next major support near 1.0900 mark support, which also happens to be the downside target of the bearish chart-pattern. Meanwhile a move above 1.1290-1.1300 immediate resistance would negate the bearish pattern and the pair could resume its near-term upward trajectory to surpass 1.1380-1.1400 resistance area to test its next resistance near 1.1450 level.

After decisively clearing 1.5500 mark barrier, led by last week’s Conservative Party’s victory in UK general election, the pair on Monday conquered another resistance near 1.5550-60 area, marked by 38.2% Fib. retracement level of the pair’s big downfall from 2014 highs to lows touched in April 2015. On Tuesday the pair extended its momentum and moved and is holding above 200-day SMA resistance. Should the pair continue holding above 200-day SMA, it is more likely to make an attempt towards testing a confluence resistance near 1.5870-80 resistance area, comprising of 50% Fib. retracement level and the upper trend-line resistance of a short-term ascending trend-channel formation on daily chart. Meanwhile on the downside, 200-day SMA near 1.5640-30 area, closely followed by 38.2% Fib. retracement level near 1.5550 level, now seems to protect immediate downside. Only a decisive weakness below this immediate support levels might force the pair towards testing the lower trend-line support of the ascending channel, currently near 1.5350-40 region.

The pair once again managed to hold and rebound from a support confluence near 0.7850 level, consisting of a short-term ascending trend-line and 100-day SMA. The ascending trend-line support, however, seems to constitute towards formation of a bearish Rising Wedge chart-pattern. The pattern, however, would be complete only once the pair decisively weakens below 0.7850 support area, which if broken has the potential to take the pair back towards testing sub-0.7700 support area with the eventual downfall expected to continue towards testing sub-0.7600 strong support area, marking multi-year closing low level. On the upside, immediate resistance remains near 0.8000-20 psychological mark area. A decisive move above this immediate resistance seems to provide some additional near-term boost for the pair towards testing another ascending trend-line resistance, forming part of the possible rising wedge bearish chart-pattern.

The pair’s reversal from 100-day SMA extended and on Monday, the pair decisively broke below the lower trend-line support of a short-term ascending trend-channel, suggesting continuation of the near-term weakening trend. From current levels, should the pair weaken below 0.7300 round figure mark support, it seems to immediately test 2015 daily closing lows support near 0.7270-50 area. Further, a drop below 0.7250 is likely to make room for continuing the downward trajectory back towards testing sub-0.7200 level support, marking 4-year low level tested earlier this year in Feb. and March. On the upside, the ascending trend-channel break point near 0.7400 mark now seems to provide immediate resistance. Any up-move beyond 0.7400 mark now seems to be capped at 0.7450 horizontal resistance, which if conquered seems to pave way for retest of 100-day SMA resistance, currently near 0.7550 level.

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